This paper outlines the initiatives taken by central banks and financial authorities to address climate risk within the financial sector. It highlights the efforts of the Reserve Bank of India (RBI) to engage with regulated entities (REs) on climate risk assessment and disclosure. Drawing on interviews with central banks and literature reviews, the paper discusses challenges such as lack of technical skills, data limitations, and assumptions in climate modelling. Central banks have adopted phased approaches, focusing on raising awareness, developing policy guidance, and conducting stress tests. The paper emphasises the need for continuous capacity-building, stakeholder feedback, and alignment with international standards. It presents case studies of six central banks, providing practical steps for implementing climate risk assessment and disclosure regimes. The RBI has initiated similar efforts, and the paper stresses the importance of maintaining momentum and setting clear timelines for future policy actions.
